The Advisory Council for implementation of customs policy under the auspices of the Federal Customs Service of Russia held its regular session on March 24th 2005. The agenda of this meeting included the issues of importation of raw materials, component parts and production equipment by the companies- manufacturers of electronic and household appliances, as well as the improvement of customs regulation of international transportation of textile and light industry goods.

The customs service was represented at the meeting by Leonid Lozbenko and Tatiana Golendeeva (both are the Deputy Heads of the FCS of Russia) and by the heads of a number of departments.

Alexander Onischuk, President of the Association of Trading Companies and Manufacturers of Consumer Electronic and Computer Equipment (RATEK) emphasized the problems of service companies. Customs clearance of warranty and post-warranty maintenance spare parts is extremely costly and labor intensive for these service companies.

Alexander Voronin, Head of Main Administration of Federal Customs Revenues (MAFCR) of the FCS of Russia, on his behalf, expressed his readiness to render assistance in resolving the problems discussed. In particular, it was decided that price lists of manufacturers for the parts supplied were to be handed over to the customs service so that to make customs procedures easier and provide customs with the objective information for calculating the customs value of the parts. However, in his opinion, only the government, which was defining the customs tariffs policy of the state, could offer a complex solution of the problem.

Tatiana Golendeeva appealed to the business community to give up the services of “fly-by-night companies”, make their businesses as transparent as possible and initiate the practice of post-audit of their goods. In this way law abiding businesses were to win confidence of customs authorities, and to make easier customs formalities during importation of goods.

Boris Fomin, Chairman the Committee of Chamber of Commerce and Industry of the Russian Federation on textile and light industry, Natalya Demidova, Director General of National Footwear Association of Russia (NFAR), Lyudmila Melnikova, President of Russian Cotton Society, Alexandra Andrunakievich, Director General of Russian Tanning and Shoe Union and Galina Barysheva, Counselor to the President of OJSC Roslegprom took part in the discussions on the second item in the agenda of the meeting. All of them voiced unanimous concern with respect to developing urgent measures in abating contraband and counterfeit goods. In particular, those who spoke pointed out the fact that in accordance with expert opinion the Russian market of textile and light industry goods consists to considerable degree of illegal goods conveyed from China, the South East Asia and Turkey. Thus, the federal budget was suffering losses due to collection of fewer taxes and fewer customs duties. At the same time contraband of consumer goods was harmful to the resurgent potential of domestic manufacturers. The speakers spoke highly of the efforts of customs authorities in bringing order in the issue of consumer goods importation, especially in regulation of the so called “shuttle” trade.

Vladimir Egorov, Head of Main Administration for Contraband Control (MACC) of the FCS of Russia supported the standpoint of the representatives of textile and light industries, by expressing his concern in view of illegal importation of consumer goods from the countries of the South East Asia, China and Turkey. Thus, in the period from February to December of 2005 in the course of interregional operation “Vostok (the East)”, targeted to prevent the facts of illegal importation of goods from the above regions, there were initiated 194 criminal and 2934 administrative violations cases (compare with 2004 - 15 criminal and 513 administrative suits). “There were brought more than 100 criminal and 200 administrative suits on the facts of illegal conveyance into the customs territory of the Russian Federation of the controlled commodity groups in January-March of 2006 in the subsequent stage of the “Vostok (the East) operation”, said V/Egorov, Head of the MACC of the FCS of Russia.In April of 2005 in Vostochny seaport, within the responsibility area of Nakhodka Customs the customs authorities detained more than three hundred containers. The goods for the amount of 650 million rubles were withdrawn from the illicit traffic. In October of the same year, within the responsibility area of Nakhodka Customs there was shut down the channel of counterfeit sports footwear and clothing contraband. There were started 10 criminal cases on illegal use of such brands as “Nike”, “Adidas”, “Reebok”, “Puma” and contraband of sports footwear as per Articles 180 of the Criminal Code of the Russian Federation. There were detained goods for the amount of more than 88 million rubles.

The most vulnerable, in the opinion of V.Egorov, in terms of border and customs control were the Russian-Kazakhstan and Russian-Ukrainian sections of the state border. Thus, a considerable amount of Chinese goods were conveyed across the under developed border with Kazakhstan missing the existing customs checkpoints. According to preliminary estimates, only in September – October of 2005, law - enforcement authorities detained at this section of the state border more than 450 tons of the Chinese goods for the amount of 250 million rubles. Major offenders were physical persons, conveying the goods in small batches declaring them as goods for personal use.

In the north-west direction the customs authorities precluded the facts of contraband disguised as the “schemes” which envisaged actual substitution of high-tax goods with “cover” goods after passing the state border on the way to the customs of destination for customs clearance.

V.Egorov, Head of Main Administration for Contraband Control (MACC) of the FCS of Russia in the end of his speech said that customs authorities of the country were beginning to use the tactics of pinpoint strikes at the offenders of the Russian laws.

On the results of the discussion there was decided to set up working groups for more detailed development of the issues discussed and preparation of their practical solutions.